List of top Economics Questions on Monetary Policy

Arrange the following conditions from most to least liquid form: (A) Currency + Demand Deposit + Savings deposits with Post Office savings banks.
(B) Currency + Demand Deposit + Net time deposits of commercial banks + Total deposits with Post Office savings organizations.
(C) Currency + Demand Deposit.
(D) Currency + Demand Deposit + Net time deposits of commercial banks.

Match List-I with List-II \[ \begin{array}{|c|l|c|l|} \hline \textbf{List-I} & & \textbf{List-II} & \\ \hline (A) & \text{Cash Reserve Ratio (CRR)} & (I) & \text{Central Bank of the Country} \\ \hline (B) & \text{Statutory Liquidity Ratio (SLR)} & (II) & \text{The interest rate at which the money is lent by Central Bank} \\ \hline (C) & \text{Lender of last resort} & (III) & \text{Percentage of deposits which must be kept as cash reserves with the Central Bank} \\ \hline (D) & \text{Repo Rate} & (IV) & \text{Reserves in liquid form in the short term} \\ \hline \end{array} \]

Arrange the following steps in the correct sequence when RBI sells government bonds in the open market:
(A) The money supply in the economy decreases.
(B) Banks have fewer reserves available for lending.
(C) Private individuals or institutions buy the bond from RBI.
(D) The payment made to RBI reduces reserves in the banking system.
Choose the correct answer from the options given below:

Currency notes and coins are called:

Prime beneficiary of the Minimum Support Price (MSP) fixed by the government is ................ (Choose the correct option to fill in the blank)

“Margin requirements are extremely helpful in correcting the situation of deflationary gap in an economy.”
Justify the given statement with valid arguments.

Read the following statements carefully:
Statement 1: Open Market Operations refers to purchase/sale of Government Securities (G-Sec) by the Central Bank.
Statement 2: To decrease money supply, Central Bank will sell the Government Securities to commercial banks.